Like much of Apple’s retail strategy, the program is more about convenience than price. According to employees familiar with the program, customers can bring in an iPhone and, after answering a few questions in the system, be told how much their phone is worth. They instantly receive a credit that can be applied toward the purchase of a new iPhone.

The credit, up to $280 for a high-end phone in top condition, certainly covers the entry-level cost of an iPhone 5, which starts at $199 with a new contract. In that scenario, the customer would receive a gift card for the remaining balance.

But if a customer is trading in while in the middle of their contract, the $280 pays for a fraction of the $650 entry price for a iPhone 5 without a subsidized contract. In those scenarios, buying a new phone won’t extend the customer’s contract, a person familiar with the process said. Read More »

Verizon Wireless is following industry rivals in introducing a program to let customers upgrade their smartphones more frequently, although at a steep monthly cost. The plan, called Verizon Edge, is slated to be available in late August. Like rival AT&T’s Next plan announced earlier this week, the plan bills subscribers for the full price of their phones — broken into monthly payments — but lets them upgrade to new devices once six months have passed and 50% of the price of their existing phone has been paid off. The plan doesn’t come with a service contract, but subscribers are on the hook for the phone payments if they leave the carrier. T-Mobile US also unveiled a new program last week for customers to upgrade as often as twice a year if they pay a fee on top of an existing phone financing option. Read More »